The government of Saudi Arabia is attempting to convert its capital, Riyadh, into an AI center.
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WWhen Saudi Communications Minister Abdullah Al Swaha took the stage on the Leap Tech conference in Riyadh in March to brag in regards to the kingdom’s tech ambitions, a centerpiece of the pitch was an accelerator that may create 300 latest startups within the space in only three years of artificial intelligence.
“Last year we announced the largest generative AI accelerator, Gaia, and this year, in collaboration with you, we decided to scale it up to $1 billion under the patronage of His Royal Highness,” he said within the speech.
But founders who’ve been through this Gaia program told Forbes that the dominion has been slow to pay out promised government subsidies – if it has paid out in any respect. Each founder expected to receive $40,000 in government grants and an extra $100,000 in equity funding from New Native, the startup accelerator that ran the Gaia program. According to interviews with seven Gaia founders, internal documents and Zoom meeting recordings reviewed by ForbesMany of the startups didn’t receive the grants or the investment, which totaled an estimated $4.2 million.
The only startups that benefited from Gaia’s pitch were members of this system’s first cohort, who received grants from the Saudi government and only a fraction of New Native’s investment, two of the founders said. Five others who spent tens of hundreds of dollars on travel and accommodation to attend the 10-week program in Riyadh in 2023 and 2024 said they received no money in any respect.
“These founders stopped what they were doing to spend a few months in the kingdom and spent over $20,000 and they are very bitter about it,” one said. “This looks bad for the Saudi government.”
The program is funded by the National Technology Development Program (NTDP), the Saudi government agency tasked with constructing the dominion’s technology ecosystem. I used to be contacted for comment, said Meshal Alkabeer, vice chairman of entrepreneurship at NTDP Forbes It had offered additional support to the Gaia startups and the grants were now being processed for startups that had submitted the required documentation.
Simon Olson, co-founder of New Native, said that while the corporate has the chance to speculate in Gaia startups, the investment isn’t guaranteed. “I know it’s not perfect and we’re improving a lot of things in this region over time,” Olson said. “We continue to support these companies with our own private capital and run the program at zero cost for startups.”
Gaia was intended to draw among the world’s hottest early-stage AI founders to the dominion, with the goal of launching 300 latest AI startups in only three years. Founders who participate would register a business in Saudi Arabia and receive a residency visa to encourage them to remain and proceed constructing their firms after this system ends. It was touted as a quick track to connecting with Saudi officials and native businesses which are booming due to a Trillion dollars Kingdom Government Investment Plan. billionaire Bill Gates and business influencers Gary Vaynerchuk Both recently visited Gaia’s headquarters while touring the Saudi capital.
The program guarantees founders $40,000 in grants to assist pay bills while they work on their startup ideas. But among the founders within the second and third cohorts do Forbes the person spoken to had not yet received this scholarship; There were delays in registering an organization and a few documents were rejected by NTDP. Although NTDP had helped them navigate the local bureaucracy, which has limited experience working with foreigners, the founders said they’re still waiting for the grants to be disbursed.
“They’re trying to skip an industry. Do you expect it to be perfect?” one in all the founders asked. “The vision is much bigger than just a grant; They give us access to all of Saudi Arabia’s data.”
The financing of $100,000 in exchange for 7% equity was to come back from New Native’s VC partner, the American fund Venture Growth Partners. But New Native co-founder Pawel Czech told the founders that that funding fell through after this system launched, in response to a recording of a Zoom meeting in February viewed by Forbes. Founders of this system said Forbes that only founders of the primary cohort had received a portion of the investment funds, about $40,000 of the promised $100,000, which, they were told, got here directly from New Native management.
“The main problem is that New Native promised everyone that they had secured cash, but they didn’t,” said one founder, who wished to stay anonymous. Venture Growth Partners didn’t reply to a request for comment by press time.
New Native co-founder Czech had told the Gaia founders that his contract with NTDP was contingent on bringing startups to the dominion. “Our KPI is to register companies in Saudi Arabia,” Czech said in a Zoom meeting in February. “If we don’t meet the schedule, we don’t get paid.”
According to a December 2023 email received from ForbesCzech offered Gaia’s founders a compromise to make up for the delays by proposing to halve the 7% equity investment the accelerator would have cost or to delay the investment until February 2024.
In one YouTube video Filmed at a Gaia demo day this month, Czech said New Native this month planned to shut a $100 million fund backed by Dubai-based crypto investor Mempool to speculate in startups to speculate in this system. Mempool co-founder Ian Arden said fundraising was ongoing.
The Saudi dreams of the founders who took part within the Gaia program have also suffered a setback.
The Gaia Accelerator website continues to advertise a $100,000 capital investment from New Native and is barely inviting applications for the fourth cohort of founders Last month. “They are starting the fourth cohort, but they haven’t secured funding for the earlier cohorts yet, which is pretty strange,” says one in all the founders, who continues to be waiting for a check from New Native.
New Native and NTDP told the story Forbes that the fourth cohort of the Gaia program was suspended until a brand new fund was raised.
In addition to trying to determine Riyadh as a hub for AI startups, the dominion can also be trying to speculate large sums in technology and AI. At the Leap Conference, Minister Al Swaha announced $12 billion deals with tech giants like Google, Amazon and Oracle, in addition to a partnership with AI chip maker Groq. The New York Times reported in March that Saudi sovereign wealth fund PIF was reportedly negotiating a $40 billion AI fund with enterprise capitalist Andreessen Horowitz.
Saudi Arabia’s Gaia accelerator and AI ambitions are only one a part of Prince Mohammed bin Salman’s Vision 2030 plan to diversify his kingdom’s economy away from dependence on fossil fuels. This extensive plan features a $1.5 trillion project to construct a brand new city and tourist center. Neomon the Red Sea, together with plans to spice up the country’s technology and manufacturing sectors and produce more Saudi women into the workforce.
Bloomberg reported earlier this month that the Neom project can be scaled back PIF’s money reserves fell to $15 billion, its lowest level since 2020, when PIF began disclosing its money holdings. “We are quite well positioned to be an AI center outside the US,” PIF Governor Yasir Al-Rumayyan said in a speech in February touting the dominion’s ability to fund and operate AI data centers , in response to Reuters reported.
The Saudi dreams of the founders who took part within the Gaia program have also suffered a setback. Gaia’s founders said among the startups involved had failed or stalled, while many were still out of pocket. Other founders talked Forbes The prospect of local business deals would bring them back to the dominion.
The Saudi Communications Minister Al Swaha himself desires to be measured by results. “Every year we will come back and show you how we put our words into action… and show how we transform a kingdom, a region and the world, powered by you, talent and technology,” he said in his Leap speech .
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